Buying A Business With Employee Union Members

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If you are buying a business where employees are members of an organized union, you will want to learn all you can about the union and the advantages and disadvantages.  The seller should have all of the information, allowing you to walk into the business understanding the union and why the employees feel the necessity of belonging to it.  Of course, you will know if your state is a right-to-work state, which may mean that some of the employees are members of the union and some are not.  Union members believe it is useful to band together in pursuit of goals that improve the work life and general well-being of each individual in the group and that the security they feel is worth the fee paid.

Collective action typically evolved as a defense against oppressive power on the part of owners.  Substantial growth in the number of unions and their membership followed the federal legislation of the 1930s, guaranteeing workers the right to organize without interference from employers.  Because of the decline in industrial jobs, unions have declined.  Membership also declines when the union offers no advantages over what is provided by management.

On the other hand, service jobs and professionals have become more militant in their collective actions.  The assumption is often made that unions are interested only in more money.  While it is important, it certainly is not the only issue.  Teachers have fought for smaller classes and other benefits for their students.  Nurses have bargained for more participation in patient care decisions.  Firefighters have fought against chiefs for their aggressive, fear-instilling management styles.  Pilots have taken pay cuts in order to help struggling airlines survive and have collectively fought against management in an attempt to maintain safety standards.  Inadequate, arbitrary, or non-existent grievance procedures have also triggered sympathy and collective protests.

A common complaint of unions is that everyone benefits equally, whether they deserve it or not.  An employee can do just enough to get by and get the same raise and benefits as an employee who works twice as much and is twice as productive or more.  A better educated workforce with high goals, different values, and questioning attitudes requires creative management responses.

When management maintains a dual focus on individual and organizational well-being, many of the reasons for unionization fall away. Enlightened managers in many successful companies have abandoned the ‘us vs. them’ syndrome.  Profit sharing, gain sharing, stock ownership, and monetary rewards for innovative ideas are all ways of making partners out of traditional adversaries.  Union leaders now sit on boards of directors.  Union leaders also participate actively in designing organization improvement programs such as team building, quality circles, and action research, all focused on productivity as well as quality of work life.  They have become less rigid by broadening job classifications and allowing cross training.

Joint efforts to improve effectiveness and efficiency can be successful, and at the same time, increase participant satisfaction.  Evaluate the union in your business to see how to better serve your employees.  Everyone can benefit from making your business a better place to work and learning to do the work better.

  • Author: Pat Jones
  • Title: President/Owner - Business Broker
  • Company: Pat Jones Business Brokers
  • Company Website:
  • Date: March 02, 2017
  • Category: Buying a Franchise or Business
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